Plans for a mass energy supplier switch could save Tyneside households an average of £122 a year, it is estimated.
North Tyneside Council’s cabinet has agreed to promote the scheme and “signpost” residents to national switching contractor iChoosr.
After households have agreed to sign up, iChoosr will present the large number of potential customers to energy suppliers.
This is followed by an auction, providing the best deal possible for people who have opted to join.
The principle is that, through presenting suppliers with a large batch of customers, unit rates will be offered which are cheaper than those available to households on the open market.
Based on the 450,000 households elsewhere in the UK which have gone with iChoosr, the average annual saving is £122.
The promotion will start next month and North Tyneside will provide a telephone support system with staff trained by iChoosr.
The cost is expected to be covered by payments made by iChoosr to the council, which are £5.50 for each gas switch customer, the same for electricity, and £11 for dual fuel.
North Tyneside expects around 5,000 households to register and an estimated 1,600 to actually switch.
Assuming that all were on a dual fuel contract, this would provide the authority with an income of £17,600.
Households can register an interest in switching energy suppliers, free of charge.
North Tyneside believes such a scheme is needed, given that energy prices rose by an average of 9% last autumn and that excess winter death statistics for 2012-13 saw a rise in the North East from 860 to 1,700 cases. John Stirling, cabinet member for sustainable development, said: “Approximately 57,000 homes in our borough have never changed their energy supplier, meaning they have potentially missed out on hundreds of pounds of savings.
“With around 10,000 of our households living in fuel poverty, we must act now and help residents access and take advantage of such schemes, and I am delighted we now have the means to do so.
“As a council, we are committed to reducing residents’ fuel bills and we are making great progress through our different initiatives.
“I am confident we will achieve the same success with the collective energy scheme, which we hope to have up and running by late autumn.”
Northumberland County Council has used a collective scheme called Ready to Switch, which attracted 946 customers, resulting in total savings of £117,000
iChoosr has been appointed by the Local Government Association (LGA).
Acting on behalf of the LGA, the North East Procurement Organisation has issued the Framework for Collective Energy Switching.
Working on behalf of North Tyneside, Warm Zone CIC will continue to offer full and partial grants to residents for the installation of loft and cavity wall insulation and help towards central heating improvements.
Through a previous contract held with the council, Warm Zone has already helped over 16,000 homes across North Tyneside with their energy efficiency, amounting to £1.5m saved on residents’ fuel bills.